Five Mistakes People Make When Managing Debt

Debt is something that affects a lot of Australians. The problem with debt has something to do with bad habits and poor budgeting. Despite how simple these things usually are, a lot of people seem to completely forget them and it can drown them in debt. We have narrowed down some of the most common mistakes that people to help you avoid them. Check them out below:

1. Not paying on time: There are the late payment fees, which can run into the hundreds every month, and you also miss out on ‘interest free period’ offerings for any new purchases. Late payment fees can also accumulate which makes it a lot harder to pay off.

2. Only making the minimum payment: If you are only covering the interest, then it’s dead money. You need to pay as much above the minimum as you can.

3. Not communicating with your bank: If you cannot make this month’s payment, then get on the phone. The bank can defer the payment due date, which will save you late fees.

4. Consolidating and not closing: If you consolidate or transfer your balance, close your other debts. An empty credit card will find an expense.

5. Trying to get out of debt without a plan: You need a plan to pay down debt, which includes having a budget and a timeline.

What you can do

In order to avoid getting dragged into deeper debt, you need to avoid all the things that are mentioned above. However, there are also other simple things that you can do to help you get away from debt and stay out of it.

1. Use cash – Veering away from the usual way of using your credit card will give you a lot of benefits more than you thought it will.

Firstly, it takes away the possibility of you increasing your debt. That also means that you don’t have to pay for monthly interest that comes with it. Second, you get to meet the seller personally, making you build a relationship with your seller. Using cash is not only good for your bank account, but also for your general well being as well.

2. Buying only what you need – Rewarding yourself after all your hard work is not bad. However, buying everything that you see because you want to reward yourself is really dangerous.

Try to avoid sales because they usually trick you into making you think that you need an item because it’s on sale. If your clothes are still in good condition and they still look good, don’t be quick on ditching them right away.

Find ways to mix and match them with your other clothes and use the money that you are supposed to use on buying new clothes into something more important such as paying off old debt, groceries and utility bills.

Debt Mediators provides effective solutions for Australians struggling with loans, credit and other forms of debt. Get your free Savings Estimate today and discover how to ‘Ditch Your Debt’!

Related articles:

Struggling with more than $8,000 of unsecured debt? You could be eligible for debt relief! Discover how to stop debt collector calls, freeze interest and fees, reduce payments and only pay back what you can afford. Start now with a free consultation

Free Debt Analysis

Request your Free Savings Estimate today, and receive a tailored solution to regain control of your finances and get out debt fast.

First Name*

Last Name*

Email*

Contact Number*

State*

Safe, Confidential and No Obligation

Free Consultation

Discover what Debt Relief options are available to your unique financial situation.

Confidential, Safe & Secure

98%PositiveRating

The people at the DCS Group are wonderful and have helped us out so much i will be forever grateful. We were in a rut and didn't think we would ever be debt free and finally i am a...Suzanne Lee Cooper - 10-Aug-2018

Helpful and very friendly staff Very understanding people. Listened to my every enquiry and sympathised with me in order to make my payments more comfortable. They were always happy to help me09-Aug-2018

Extremely helpful and easy to deal with. If I ever found myself in financial trouble again I would definitely use them again.Vanessa Anne Field - 06-Aug-2018

DCS went beyond normal customer service for me.They regularly talked to me about where things were going, even in good and bad times. They always recommend the way to go,and found the way to finalise my debt when harder times c...03-Aug-2018